In the wake of recent U.S. trade policy changes that have increased duties on a range of Indian goods, New Delhi is actively exploring a package of support measures to shield its exporters from the potential fallout. With American import levies now reportedly reaching up to 26% on select Indian products, concerns are mounting among domestic businesses, particularly small and mid-sized exporters, about losing their competitive edge in one of their largest overseas markets.

According to government officials familiar with the matter, the Indian Commerce Ministry is weighing a number of relief measures. Among the top options under discussion:

Subsidized Credit Access: The government may extend interest equalization benefits on bank loans given to exporters, especially those in labor-intensive sectors. This would help lower borrowing costs and improve cash flow for businesses strained by reduced margins due to the U.S. duty hike.

Insurance and Market Incentives: Officials are also considering enhancing the government-backed insurance scheme on export credit, which would mitigate the risks faced by exporters when buyers in foreign markets default. Additionally, new marketing support programs may be rolled out to help Indian exporters tap into alternative markets such as Africa and Latin America, thus reducing over-reliance on the U.S.

Targeted Sectoral Support: Industries expected to be hit hardest by the U.S. move include gems and jewellery, pharmaceuticals, chemicals, and engineering goods. Tailored support packages for these sectors may also be part of the relief strategy, which is likely to be finalized following high-level consultations.

Commerce and Industry Minister Piyush Goyal has already met with representatives from nearly 30 export promotion councils to gather inputs on the challenges faced due to the evolving global trade landscape. The government’s approach appears to be focused on precision — targeting help to sectors and enterprises that are most vulnerable, rather than rolling out broad-based subsidies.

These developments come amid concerns that India’s annual goods export growth might remain under pressure, having barely touched $437 billion in the last fiscal year — a figure which the government had hoped to expand substantially.

In a complementary move, the Reserve Bank of India (RBI) has lowered its benchmark interest rate for the second straight time, signaling a shift toward a more accommodative monetary stance. The easing of rates is likely to offer some breathing room for credit-stressed exporters, while also stimulating broader economic activity.

Economists suggest that continued rate relief and improved liquidity can enhance the competitiveness of Indian exports globally, particularly in a time when demand from Western economies is expected to slow due to inflationary pressures and monetary tightening.

On Tuesday, April 9, 2025, Indian equities showed mixed movement, reflecting cautious optimism amid the trade tensions. The BSE Sensex, after touching a historic intra-day high of 75,124.28, ended the session at 74,684, a drop of 59 points. The NSE Nifty 50 also saw a similar trajectory, briefly hitting 22,768 before closing at 22,643, down by 24 points.

The stock market reaction suggests investors are adopting a wait-and-watch approach. While the broader sentiment remains positive due to the RBI’s policy easing and India’s robust domestic demand, the rising cost of accessing U.S. markets for Indian exporters could cap near-term gains for certain sectors.

Sector-wise, the metal segment outperformed, buoyed by hopes of increased government support for export-heavy industries. In contrast, media and public sector banks lagged behind, indicating investor apprehension about policy impacts on domestic credit and consumption.

As global trade dynamics continue to evolve, India appears determined to fortify its export economy with a calibrated mix of financial incentives, strategic market realignment, and policy-level adjustments. The coming weeks will be crucial in defining the contours of this response — one that may shape India's external trade trajectory for the year ahead.